Chinese national, no UK footprint looking to buy family home in London


Since various investment restrictions were lifted by the Chinese government, we have seen a significant influx of Chinese investment funds into the London property market. As foreign nationals looking to buy UK property, often with no UK footprint, this tends to be in the realm of private banks and niche lenders as opposed to traditional banks. So, when we were approached by a Chinese national looking to acquire property in London to the value of £2 million, we began to look at the options available.

Client scenario

There has been a significant increase in the number of Chinese investors looking towards not only the London property market but also the UK education system. While finding a lender to provide £1.5 million mortgage funding was not an issue, we knew the LTV would be challenging. The scenario was as follows:-

Property to purchase: London family home
Property value: £2 million
Mortgage funding: £1.5 million
Required LTV: 75%

As this was a family home, in effect an investment in the education of the client’s daughter, this offered a degree of stability which is appreciated by lenders. However, when we investigated further it became apparent that there would be a number of additional challenges to overcome.

Issues to address

While the client was a wealthy individual their wealth originated from a Chinese based business, where accountancy standards/regulations differ from the UK. We knew at a fairly early stage that traditional banks would not be the optimal route and instead private banks/niche lenders would be the best option. Traditionally, private banks and niche lenders will normally only recognise overseas income/business interests that employ the services of the top four accountancy firms – a major issue we had to overcome.

Wealth: Business based in China
Income: Foreign currency income
Residency: Never lived in the UK
Credit history: No UK footprint
Mortgage funding: £1.5 million
Mortgage type: Interest only
LTV rate: 75%

We often come across clients with overseas-based business interests, no UK footprint and foreign currency income streams. The fact that this client had never lived in the UK, but planned to move to the UK after purchasing a family home, created an interesting backdrop to say the least. As with the vast majority of our mortgage customers, there would be no off-the-shelf funding structure to use. A bespoke arrangement would need to be built around the client’s complex situation.

The solution

Over the years we have built very strong relationships with an array of private banks and niche lenders. As a consequence of our independent status, we have been able to satisfy funding requirements for a growing number of Chinese investors looking at London property. In this particular situation we utilised our private bank contacts to secure mortgage funding on extremely attractive terms.

Property value: £2 million
Mortgage funding: £1.5 million
Required LTV: 75%
Mortgage type: Interest only
Mortgage interest rates: 2.14% fixed for 2 years/2.39% fixed for 5 years

We were delighted to secure the above funding especially bearing in mind the lack of a UK footprint never mind credit history. Traditionally, even some private banks have been reluctant to lend on a high LTV where foreign income streams and foreign wealth is involved. However, as a consequence of our contacts and relationship with the private banking sector, we managed to overcome this. The two-year and five-year fixed rates were extremely competitive and the interest only structure would assist with cash flow going forward.

What can Enness do for you?

Since 2018 we have secured mortgage finance for more than 70 different nationalities looking to acquire property across the globe. We have built up contacts in the private banking sector, niche lending sector as well as traditional high street banks. In this particular case study we managed to secure not only a high LTV but also two-year and five-year fixed-rate options which were extremely competitive. The fact that the client had no footprint/connection with the UK was a challenge but one that we were ultimately able to overcome.

We would welcome the opportunity to speak to other prospective clients in a similar situation. Many of those who approach us have been previously turned down by competitors often unwilling to take on what can be complex scenarios. We can discuss your requirements in more detail, the options available and also obtain real-time market rates to give you an example of costs going forward.

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